|PRINT | CLOSE WINDOW|
The partnership between Christa Development Corp. and Morgan Management LLC has purchased the Strathallan Hotel and plans to modernize the 36-year-old building and capitalize on the city's blossoming East End.
The Christa-Morgan entity 550 East Ave LLC closed on the purchase last Friday from Florida-based Driftwood Hospitality Management LLC and a real estate investment trust, Gencom Group. The price has not been disclosed.
"We're going to redo the entire hotel, from top to bottom," said Morgan Management CEO Robert Morgan. "We just haven't decided which flag we're going to put on it yet. We could even keep it the same. Most likely it's going to be a flag of some sort.
"It's a tired property. We're going to bring it back to life."
Florida-based Driftwood Hospitality bought the Strathallan in 2007 from local owners John Summers and Charles Constantino for $11.4 million. It recently decided to sell, said Gail Morelle, business development director at Christa.
"Their broker contacted us, so there must've been other interest in the property as well," she said. "We don't know who the other parties would've been."
Representatives of Driftwood Hospitality did not respond to a request for comment.
Essex Hotel Management LLC in Chili will oversee the Strathallan. No decisions have been made on any changes in the hotel's employment, Morelle said.
"We did walk-throughs, and we met with the management company that's going to be going in there," she said. "They have years of experience in this type of business.
"We based our figure on the numbers that made the pro forma work and made it profitable. It's a great location, it's a great building, but in the end it has to be profitable as well."
Based on Scottsville Road, Essex has developed, owned and managed hotels and multifamily real estate for 25 years. It addition to the Hampton Inn in Webster, it manages the Best Western in Victor and two Microtel Inn & Suites in Verona, Oneida County, and Middletown, Orange County.
"The Strathallan is located in a great part of town," said Jerald Eichelberger, Essex CEO, chief financial officer and director. "We want it to be a great place to stay. We want to attract a broad spectrum of people coming to Rochester to visit not only the East End but the downtown area, the Finger Lakes region.
"We just want it to be what it has always been intended to be: a classy place that appeals to a broad spectrum of guests."
Essex also manages the Air Park Office Building near the Greater Rochester International Airport and the Meadows of Geneseo student apartments near the SUNY College at Geneseo. Its portfolio includes 3,500 rooms in 12 states.
The 2.2-acre Strathallan property is assessed at $8.3 million, Monroe County assessment records show. It was assessed at $4.75 million when Driftwood bought it four years ago. The previous owner spent $3.5 million to upgrade the hotel.
"The site itself is irreplaceable," Morelle said. "It's close to the Jazz Festival, art galleries and museums.
"The building itself is great. It's structurally sound. Its reputation for excellence and its roots made it something that was of interest to the parties."
The Strathallan is the fourth lodging facility in the Christa portfolio. The Victor firm and Essex co-own the Hampton Inn in Webster. Christa also owns the Homewood Suites and Holiday Inn Express in Victor.
"We don't have day-to-day interaction," Morelle said. "Normally, with a hotel situation, there are companies like Essex out there where that's all they do. They have the formula. They know what kind of people to hire. They go in and manage it."
Strathallan owners hope to have an architect and develop renovation plans by next month, Morelle said.
"The Strathallan basically needed some updating, some freshening," she said. "Not that it's not prestigious at this point, but we want to bring it back to a more modern and prestigious hotel."
The first building on the site was a three-story brick home built in 1876, according to historical research from the Landmark Society of Western New York Inc. The house was bought in 1954 by four partners who wanted to turn it into an office building or an apartment complex, but the partners dropped the plans because of financial problems.
The land was sold to a local construction firm in 1960. Rochester developer Charles Brennick bought the property in the early 1970s and in 1973 built an apartment complex for seniors, but that venture failed.
The building was converted to a hotel in 1979, with Summers and Constantino buying it in 1988.
Many of the Strathallan's 151 suites have balconies overlooking East Avenue, Strathallan Park and the city skyline. There are four meeting rooms, with a maximum capacity of 300 for meetings and 225 for banquets.
The Christa-Morgan partnership is also involved in the proposed redevelopment of the Midtown Tower for mixed use. The city of Rochester has announced plans to sell the tower for $2 to partnership entity 80 South Clinton LLC.
Morgan and Christa CEO David Christa are looking to acquire or build additional hotels, Morgan said. The two plan to build one in Pittsburgh.
"We saw that the Strathallan was coming up on the market," Morgan said. "We've always liked it. It's a great place. It's a tremendous location, with all the cultural aspects around it. It's a property we're excited to rejuvenate."
12/16/11 (c) 2011 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail firstname.lastname@example.org.